Opinion
01 C 50374
April 29, 2002
MEMORANDUM OPINION AND ORDER
Plaintiff, TruServ Corp. f/k/a Cotter Company ("TruServ"), originally filed a three-count complaint in an Illinois state court against four corporate defendants, H.R.W. of New Mexico Inc. ("New Mexico"), H.R.W. of Texas Inc. ("Texas"), H.R.W. of Las Cruces Inc. ("Las Cruces"), and H.R.W. of El Paso Inc. ("El Paso"), and against two individual defendants, guarantors of the above named corporations, Harry and Virginia Wiley ("Wileys"). Defendants removed the case to this court pursuant to 28 U.S.C. § 1441(a) on the basis of diversity jurisdiction. See id. § 1332. Before the court is TruServ's motion to remand the case to state court pursuant to 28 U.S.C. § 1447(c) due to lack of subject matter jurisdiction.
The diversity of citizenship requirement of 28 U.S.C. § 1332(a)(1) is uncontested. Thus, this court's jurisdiction hinges upon whether defendants can meet their burden of proving that the amount in controversy exceeds $75,000 for each defendant as required by 28 U.S.C. § 1332(a). See Kamel v. Hill-Rom Co., 108 F.3d 799, 805 (7th Cir. 1997). The starting point in determining the amount in controversy is typically the face of the complaint. See Chase v. Shop `N Save Warehouse Foods, Inc:, 110 F.3d 424, 427 (7th Cir. 1997). "Accepted wisdom" provides that the plaintiffs evaluation of the stakes must be respected when deciding whether a claim meets the amount in controversy requirement for federal diversity jurisdiction. Barbers, Hairstyling for Men Women, Inc. v. Bishop, 132 F.3d 1203, 1205 (7th Cir. 1997). TruServ's complaint, on its face, requested judgment in the amount of $587,127.32 against all defendants without an itemized listing. (Compl. ¶ 16) While TruServ admits that its complaint was "inartfully drafted," it asserts that the exhibits annexed to the complaint show clearly that its claims against three of the corporate defendants — New Mexico, Las Cruces, and El Paso — do not meet the minimum amount in controversy for diversity jurisdiction. Specifically, TruServ's exhibit group E indicates that New Mexico allegedly owes $57,025.98, Texas owes $422,457.96, Las Cruces owes $56,650.69, and El Paso owes $49,516.73. Since the exhibits attached to the complaint show that three of these defendants do not meet the amount in controversy requirement of 28 U.S.C. § 1332(a), remand to state court is appropriate.
Nevertheless, the court points out that defendants failed to specify which state TruServ has its principal place of business in their notice of removal, saying only that plaintiff is "qualified to do business in Illinois, with offices in Harvard, McHenry County, Illinois." When invoking a federal court's diversity jurisdiction, a party must be more specific than this regarding the citizenship of a corporation. See 28 U.S.C. § 1332(c)(1); Cincinnati Ins. Co v. Eastern Atlantic Ins. Co., 260 F.3d 742, 747 (7th Cir. 2001). In light of the court's decision regarding the amount in controversy, however, the court will not pursue this any further.
Defendants argue that this court may nevertheless exercise supplemental jurisdiction over these three defendants pursuant to 28 U.S.C. § 1367. Defendants cite Stromberg Metal Works, Inc. v. Press Mech., Inc., 77 F.3d 928, 931 (7th Cir. 1996), but Stromberg merely permitted adding an additional plaintiff against defendants who were already in the federal forum. Id. at 932. The court in Stromberg noted that 28 U.S.C. § 1367(b) distinguishes between permissively joined plaintiffs and defendants. "Claims against persons made parties under Rule 20 are forbidden, but claims by parties who join under Rule 20 are allowed."Stromberg, 77 F.3d at 932 (alteration in original). Since TruServ's claim is against permissively joined parties, this court may not exercise supplemental jurisdiction over defendants not meeting the amount in controversy requirement.
Defendants also cite Liberty Mut. Ins. Co. v. Construction Mgmt. Servs., Inc., No. 99 C 6906, 2001 U.S. Dist. LEXIS 15739 (N.D. Ill. Sept. 28, 2001), for the proposition that § 1367(a) gives this court supplemental jurisdiction over claims bought by a single plaintiff against multiple diverse defendants when some of the defendants meet the amount in controversy requirement but others do not, and the claims against all the defendants arise from the same case or controversy. To the extent the court in Liberty Mutual actually held this, the court respectfully declines to follow it. Original jurisdiction in this case is founded solely upon diversity jurisdiction pursuant to 28 U.S.C. § 1332. "Therefore, 28 U.S.C. § 1367(b), not § 1367(a), is the appropriate subsection to use in determining supplemental jurisdiction, and, for the reasons previously discussed, this court may not exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367(b).
Likewise, defendant's suggestion that Federal Rule of Civil Procedure 21 empowers the court to dismiss non-diverse parties in order to maintain diversity jurisdiction has no merit. If the plaintiff can avoid the federal forum by the device of properly joining a non-diverse defendant or a non-diverse co-plaintiff, he is free to do so. See Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 410 (7th Cir. 2000). Therefore, Rule 21, regarding misjoinder of parties, does not apply, and the court will not drop such non-diverse parties in order to obtain complete diversity.
Defendants assert that, even if this court lacks jurisdiction over TruServ's complaint, defendants have filed a counterclaim over which this court has jurisdiction. However, a counterclaim, even though it meets the criteria for federal jurisdiction, does not make a case removable. See Shannon v. Shannon, 965 F.2d 542, 546 (7th Cir.), cert. denied sub nom.Shannon v. United Servs. Auto. Ass'n, 506 U.S. 1028 (1992); see also 14C Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure § 3731 (3d ed. 1998) (noting that 28 U.S.C. § 1446(a) authorizes removal by defendants only on the basis of claims brought against them and not on the basis of counterclaims asserted by them).
Furthermore, defendants' request for costs and fees associated with the removal and motion to remand are denied. For all the foregoing reasons, plaintiff's motion for remand is granted and this case is hereby remanded to the Circuit
Court of the 19th Judicial Circuit, McHenry County, Illinois.